The sales of higher-speed wholesale National Broadband Network (NBN) services continue to grow, according to NBN Co’s latest figures, but fixed-line network congestion also appears to be on the rise.
NBN Co’s monthly progress update for May, released on 18 June, indicate that more end users are switching to faster NBN retail plans, with about 70 per cent of new orders on the network now based on wholesale speeds tiers of 50 Mbps (download) or higher.
Since December 2017, orders for wholesale speed tiers of 50 Mbps or higher have almost tripled, increasing from 16 per cent to 44 per cent in May, according to the company behind the NBN rollout.
It should be noted, however, that the majority of end customers – 56 per cent – continue to opt for a 25Mbps (download) wholesale speed plan or lower.
Regardless, higher-speed tier take up is on the rise, which NBN Co attributes to its new wholesale discount options, which are aimed at supporting internet providers in reducing bandwidth congestion and selling higher speed broadband retail plans.
NBN Co revealed plans in December last year to introduce new product bundles combining access charges with some network connectivity virtual circuit (CVC) bandwidth capacity.
The uptake of higher speed – and usually more expensive – services is a big part of NBN Co’s efforts to increase the network provider’s average revenue per user (ARPU).
Since the NBN rollout began, average revenue per user (ARPU) has played an essential role in the modelling of the estimated future profit of the company behind the construction of the network.
Indeed, NBN Co’s 2017 Corporate Plan referred to an increase in ARPU as one of just a handful of “critical sensitivities” that could affect the company’s long-term financial outlook and impact its peak funding range.
In February 2017, NBN Co chief Bill Morrow himself suggested that NBN Co would need a greater uptake of higher-speed products to reach the $5 billion annual revenue target it had set itself for 2020, hence the company’s ongoing efforts to push higher-tier services.
Meanwhile, NBN Co’s average bandwidth network congestion tally, not including Sky Muster satellite services, has dropped from more than five hours to less than 30 minutes per service, per week compared to this time last year.
That drop in average bandwidth network congestion, however, has not helped to slow the steady month-on-month rise of estimated monthly average percentage of homes and businesses that experience network congestion on NBN fixed-line services.
The figures for May show that there were .089 per cent of all homes and businesses connected to the NBN that had experienced network congestion during the month.
While this figure is well below the 0.121 per cent recorded in May 2017, it is higher than the .073 per cent recorded in April and the .068 per cent reported for March.
Fixed Line network congestion is calculated based on how NBN Co utilises certain parts of its fixed line access network that are shared by phone and internet providers.